When it comes to insurance, we understand that it’s a purchase most people want to make use of when they need it but think very little about when they don’t. If you’re a contractor it’s likely to be an essential part of your working life. But what happens when you down tools, or move into standard employment?
Most contractors assume that the end of a contract means the end of any liability. Unfortunately, that’s not actually the case. Claims can be made for months, or even years, after work has been completed.
A large percentage of professional indemnity claims are made in the first few months after a job has been finished (at Kingsbridge that average notification period is less than 2 months), and that percentage falls exponentially the further away you go.
More generally speaking, professional indemnity cover can make a world of difference to any contractor facing a claim, and is one of the most called upon elements of cover across the industry. It protects against claims for negligence (making a mistake, for example, or giving bad advice), alongside providing cover for the loss of documents or data, breaches of intellectual property, and defamation and libel.
Almost all contractors and freelancers will likely have professional indemnity insurance as part of any policy they hold (it’s one of the main elements in our package of insurance, for example).
But it also operates on what’s known as a ‘claims made’ basis. What does that mean? To put it simply, you’ll only be covered for claims made against you during the term of the policy you hold. If, for example, you finish a contract and decide not renew your insurance cover and a claim is made against you for work you did during that contract, you’ll find yourself defending that claim without insurance to help you.
But there is a way to stop this happening. Most insurers offer something called run-off cover – generally for 3 or 6 years. Holding run-off cover will allow you to maintain your notification period even when your professional indemnity policy has ended. If an error or an omission is discovered months after your contracting career has come to a stop, you’ll still be protected.
So why are we mentioning this? We’ve just launched 1-year run-off cover, meaning that you can finish your work and still have the right insurance in place. At one year rather than three or six it’s easier, and cheaper, for you.
We know that almost all contracts end without incident. Contractors are experts in their fields. But it’s important to have some kind of safety net in place. It might just be a simple mistake, or even a claim made without merit, but they’ll still need defending. Paying for cover when you’ve finished work might seem annoying, but it could make a huge difference to your future.
Want to know more about our one-year run-off cover offering? Just give us a call and speak to one of our expert brokers on 01242 808740.